Note to Members concerning 5% Rate of Stamp Duty Land Tax (“SDLT”)

10 Jun, 2011

In response to requests by some members, the HBF sought clarification from HMRC as regards the circumstances where the new 5% rate of SDLT will apply and a full copy of our letter and HMRC’s reply will be made available.

In essence the 5% rate is aimed at normal purchases of dwellings by individuals but the broad definition of residential property in S116(1)(a) of the Finance Act 2003 can also catch developers that purchase property via

The purchase of a garden of a dwelling

The purchase of property where residential development has already begun

The purchase of a dwelling for re-development whether via renovation or demolition followed by re-development

We would recommend that members take specific advice in circumstances where the purchase of property includes a dwelling.

Note to Members concerning 5 of SDLT - Draft.doc